The Cheapest Cars to Insure in 2016: Answers to the Questions Every Agent Should Know

Finding the cheapest car insurance depends on a number of factors, some of which will be beyond your customers’ control. For example, where they live is a large influencer. People in metropolitan areas are going to naturally incur more risk than people in rural areas, no matter how good their driving abilities.

Taking that logic a step further, some metropolitan areas are more dangerous than others, whether by poor design or having a higher concentrated amount of bad drivers (and sometimes a combination of the two).

That’s why cities like Detroit carry an average annual premium (AAP) of more than $10,000 while Miami is considerably cheaper at an AAP of just over $3,000 even though the latter has around 300,000 more people living in its surrounding area.

Miami, in turn, would be much more expensive than cities like Fort Smith, Arkansas, or West Plains, Missouri, because it has comparatively more traffic and congestion.

That said, there is one surefire thing an insurance customer can do to reduce their costs: purchase a vehicle that is cheaper to insure. Fortunately, Forbes1 recently published a list of the top 10 cheapest cars to insure. From the bottom-up, they are:

10. Nissan Frontier S King Cab Pickup: Average annual cost, $1,204 (or $100.33/mo).

9. Jeep Cherokee Sport Utility 2WD: Average annual cost, $1,203 (or $100.25/mo).

8. Buick Encore Sport Tour 2WD: Average annual cost, $1,200 (or $100/mo).

7. Ford Escape S 2WD: Average annual cost, $1,194 (or $99.50/mo).

6. Jeep Compass Sport 2WD: Average annual cost, $1,190 (or $99.16/mo).

5. Jeep Wrangler Sport 4WD: Average annual cost, $1,181 (or $98.41/mo).

4. Jeep Patriot Sport 2WD: Average annual cost, $1,180 (or $98.33/mo).

3. Dodge Grand Caravan AVP 2WD: Average annual cost, $1,174 ($97.83/mo).

2. Honda CR-V LX: Average annual cost, $1,170 (or $97.50/mo).

1. Honda Odyssey LX: Average annual cost, $1,113 (or $92.75/mo).

What Factors Determine How Cheap a Car Is To Insure?

Color us “not surprised” that 90 percent of the cars on the above list are minivans and SUVs, each family-friendly and attracting a more cautious type of driver than you will find when it comes to muscle cars; which are, not coincidentally, the most expensive cars to insure (by about 400 percent).

Aside from the type of driver, however, the cheapest cars to insure also boast strong crash ratings — five stars out of five from the National Highway Traffic Safety Administration — and repairs are inexpensive. That’s because parts are easily mass produced and distributed, so there are fewer days in a shop and usually fewer hours of labor involved. The cars are also just not involved in many accidents, and the accidents they are involved in tend to result in cheaper repairs and lower casualty rates — refer back to crash and safety ratings.

What to Keep in Mind about Overall Insurance Costs

With all these factors in place, keep in mind that simply purchasing a cheap car to insure will not result in cheaper insurance. The above qualities belong to the automobiles themselves and not the individuals behind the wheel. As an insurance agent, it is important to stress the other factors that go into determining rates.

Credit Ratings

Fair or not, most states consider a customer’s credit rating when it comes to setting rates, with the thought process being that strong credit is an indicator of risk. There have been past correlations that people who struggle with creditors are not the safest drivers, so for many motorists the two are inescapably linked.

Other Drivers on the Policy

Teenagers on the verge of getting their driver’s licenses? Prepare your customers to pay more even if their individual accident records are spotless.

Teens just come from a higher risk pool, and they have to “prove” themselves to underwriters over time before rates rescind. That said, younger drivers can qualify for certain discounts (i.e. completing a driver’s ed course or getting the “good student discount”).

Keeping those rates down is just one of the many reasons why primary policyholders prefer to start their young drivers with makes and models like the ones listed above.

Accident/Violation History

Yes, performance matters. The fewer accidents and traffic tickets a customer gets over time, the more their rates will come down, regardless of what type of car they drive.

But that’s also where the type of automobile purchased can help. With more safety and accident prevention features, customers can give themselves every opportunity to keep their records clean.

Discount Eligibilities

Studies like the ones listed above cannot take into account — at least not without individualized information — is how much lower insurance may be purchased when stacked with other policies.

As insurance agents, it is important that customers understand the value and discounts available to them by grouping their various policies under one umbrella. By purchasing homeowners insurance, life insurance, etc., they can lower the overall cost on the auto side.

One Tip to Share with Your Customers

Buying a new car is an exciting time, and so there may be a tendency to jump the gun a little when it comes to making an offer. Advise your customers before they sign on the dotted line to a) narrow down their list to three cars; b) call you with details, price quotes, and payment information; and c) allow you to run a comparison with individualized rates factored into each price.

This will give the more cost-conscious customers a chance to see how their actual payments will shake out regardless of how expensive or cheap their car of choice is to insure.

In Summary

Studies like the one listed above are valuable for showing insurance customers what they can expect from their automobiles from both safety and cost perspectives; but insurance ratings are not an exact science, so the more personalized research they can conduct, the better.

As an insurance agent, working towards better educating your customers is one more way you can add value to their lives.

1 Forbes

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